According to the efficient market hypothesis the price of the shares should reflect all the public information and private information. If the investor and the analysts have all the information then should be able to make informed decisions regarding the firm. Hence they should be able to calculate the intrinsic value of both the firms and recommend these prices. Since the semi strong form of efficient markets incorporates the public non market information, investors and analysts should be able to analyze the financial implications for both the firm post merger and how will the shareholders of the firm be affected. They are expected to behave rationally and use their skills to arrive at a price which equals to the intrinsic value of the stock. This value should be a reflection of the future cash flows of the firm. A stock intrinsic value or the fair value is calculated by discounting its expected future cash flows with appropriate discount rate depending on the riskiness of the firm. Hence it is expected that the investors arrive at this price by taking into consideration in their calculations all the information which is available in the financial statements of both the firm and combine with the merger details plus any further news related to the firm and merger. Also since the markets are assumed to be efficient strong form of efficient, the theory also applies to stock prices of the firm. Hence it is assumed that there is no further private information with selected investors which can influence the prices of the share price if that information comes in public domain. Hence no investor exists with the private information about the merger or the two firms which can influence the stock price of the firm (Dong, Bowers & Latham, 2013).